NZD/USD struggles to pull away from daily lows set near 0.6550
- Trading action turns subdued on Friday ahead of PMI data from the US.
- NZD/USD stays in red after closing the first four days of the week higher.
- Fed's Brainard, Mester, and Daly are scheduled to deliver speeches later.
Following the 100-pip rally it staged this week, the NZD/USD pair reversed its direction on Friday and was last seen losing 0.4% on a daily basis at 0.6560.
The fact that there were no fundamental drivers on Friday paved the way for major pairs to make a technical correction. Despite today's fall, the NZD/USD pair remains on track to close in the positive territory for the week supported by the broad-based USD weakness caused by the FOMC's dovish shift in its language and heightened expectations of a rate cut in July. Reaffirming that view, "There is a broad agreement that the case for a looser Fed policy has increased," Fed Vice Chair Richard Clarida told Bloomberg today.
Furthermore, renewed trade optimism after U.S. President Trump and his Chinese counterpart Xi agreed to meet on the sidelines at the G20 meeting to talk about the trade conflict helped antipodeans such as the kiwi and the AUD outperform its rivals this week.
At the moment, the US Dollar Index is posting small daily losses at 96.57, waiting for the IHS Markit to release its preliminary Manufacturing and Services PMI reports for June.
Later in the day, Cleveland Fred President Mester, San Francisco Fed President Daly, and Governor Brainard will be delivering speeches.
Technical levels to watch for